Disappointing GDP growth drags bourse
Credit to Author: ANGELICA BALLESTEROS, TMT| Date: Fri, 09 Aug 2019 16:16:36 +0000
THE stock market finished lower for a second day on Friday as investors digested the latest economic growth data announced the day before.
The bellwether Philippine Stock Exchange index (PSEi) dropped by 0.76 percent or 59.77 points to close at 7,854.39, while the wider All Shares declined by 0.71 percent or 34.21 points to finish at 4,784.11.
Regina Capital Development Corp. head of sales Luis Limlingan said investors took into account second-quarter gross domestic product (GDP) growth, which slowed to 5.5 percent.
The figure, which the National Economic and Development Authority and the Philippine Statistics Authority announced on Thursday, is lower than the 5.6 percent recorded in the first quarter and the 6.2 percent registered in April to June 2018.
Socioeconomic Planning Secretary Ernesto Pernia attributed the slower-than-expected growth to the continued impact of the delay in the approval of this year’s budget and the election ban on government spending.
A dispute between the Senate and House of Representatives over alleged insertions resulted in the approval of the 2019 budget being delayed for the first four-and-a-half months of the year. This forced the government to operate on a reenacted budget, limiting it to spend for items detailed in the 2018 outlay and not on programs and projects supposed to be implemented this year.
Also on Thursday, the Bangko Sentral ng Pilipinas resumed reducing key interest rates by 25 basis points after taking what it called a “prudent pause” in June — a move anticipated by most economists and analysts.
Looking ahead, P2P Trade Online sales associate Gabriel Jose Perez said the bourse was likely to trade sideways due to the lack of fresh leads.
The local market bucked a rally in the US, with the Dow Jones up 1.43 percent, the S&P 500 rose 1.88 percent, and the Nasdaq grew by 2.24 percent.
In the region, Tokyo increased 0.44 percent, Seoul grew 0.89 percent, and Jakarta inched up 0.12 percent.
Shanghai declined 0.71 percent, Hong Kong dropped 0.69 percent, Singapore decreased 0.49 percent and Bangkok lost 0.61 percent.
In Manila, sectoral results were mixed, with the financials and mining and oil the only gainers, up 0.22 percent and 0.37 percent, respectively.
More than 2.8 billion issues were traded, valued at P6.16 billion.
Losers led winners, 114 to 84, while 47 issues were unchanged.